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Apples and Microtransactions: A Cautionary Tale

Once upon a time, there was a little girl. It was the dawn of the new millenium and the little girl liked to use Napster to download music. But then, one day, Napster disappeared.

The little girl was distraught. She still had a tower of CD-R discs, but no more songs to put on them. Her loving parents, in an attempt to make her happy, gave her an iTunes gift card.


Abuzz with excitement, she set up her iTunes account. But, lo! It required a valid credit card number to proceed! She promised her parents, again and again, that she would not abuse this privilege.

Yet a monster was unleashed that day. The gift card was quickly consumed but the little girl, always craving more, was insatiable. So she asked her mother if she could buy “just a few more songs.”

iTunes login old skool

About a month and a few hundred clicks later, the little girl’s mother opened an envelope and, reading its contents, was rendered speechless. It was her credit card statement. Apparently, her darling daughter had spent hundreds of dollars on hits from the 90s.

The little girl knew she’d been naughty. Even at the time, as she clicked “purchase song,” she understood that stealing was wrong. But it was just so easy to keep clicking and clicking. And they were only 99¢ each! Surely her mother wouldn’t notice a few dollars missing here and there!

But the little girl, who wasn’t very good at math, didn’t realize how quickly those dollars added up. Even when confronted with just how much damage she’d done, she could hardly believe it. The little girl got in big trouble, but the money was gone forever. The end.

iPad-Toddler

I’m not sure whether the moral of the story is “kids, don’t steal from your parents,” or “parents, don’t trust your kids with your credit cards.” It’s a cautionary tale either way. But this one also happens to be true.

I’m ashamed to admit that I was the impulsive little girl from our story. It’s been well over a decade, but I still feel pretty bad about it. However, a few days ago, I read some news that I just had to share with my mom.

To avoid a lengthy (and costly) legal battle, Apple has agreed to a hefty settlement with the Federal Trade Commission. The dispute? Unauthorized purchases made by children without parental consent.

apple-app-billing-process

It’s been well over a decade since I made unauthorized purchases through Apple without my mom’s consent. I’m sure that the statute of limitation in my mom’s case has expired. But other parents whose kids have racked up hundreds (if not thousands) of dollars on games and apps can now breathe a sigh of relief.

According to the FTC, tens of thousands of parents have complained about unauthorized purchases made by their children. Most commonly these complaints involved in-app microtransactions. You know what I’m talking about, that shit’s positively endemic in mobile gaming.

It’s a brilliant, if sickening, business model. Market a casual game that’s supposedly “free-to-play,” but which actually encourages, or even necessitates, frequent microtransactions. Most disturbing is that these “free-to-play” mobile games are quite often geared toward children playing on their mommy or daddy’s iPhone.

Smurfberries

This Wednesday, Apple reluctantly agreed to refund customers the roughly $32.5 million spent in-app by children without parental consent. According to FTC Chairwoman Edith Ramirez:

This settlement is a victory for consumers harmed by Apple’s unfair billing, and a signal to the business community…You cannot charge consumers for purchases they did not authorize.

But is it really a victory? To a company as profitable as Apple, $32.5 million is chump change. It’s probably only a fraction of what parents, worldwide, are actually owed.

Apple’s billing policy is pretty similar to how it was more than a decade ago when I purchased songs on iTunes without my mom’s knowledge or consent. Now, had my mom been more technologically savvy, she would’ve realized the computer was storing both her credit card number and password, but does that mean it was her fault?

It begs the question: is it the parents’ responsibility to monitor what their children are doing in an age when technology makes it easier than ever to spend money at any given place or time, or is it the company’s responsibility to protect their customers from unauthorized purchases? I don’t know the answer, but I do know that companies are unlikely to abandon lucrative business models that rely on microtransactions. The real question is whether or not and to what degree Apple will change their billing procedure.

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